A few days ago I watched the movie “The Big Short“. I was interested to see how what happened in those years was portrayed in the film. To most of the viewers the stories in the movie may look like an inflated version of reality. To those that witnessed what happened in person that looks like what really happened.
Today I was reading the Financial Times and an article caught my attention. Due to the increased costs of office space in London some investment banks are looking to relocate tech and operational jobs in less expensive cities in the UK, whilst keeping the jobs that in their view really matter (front office, meaning those that make the deals and interface with clients) in London.
The article closed with a statement that is worrying as it reflects the lack of leadership and the mentality that still pervades most of the industry. It is asserted that it is OK to loose masses of bank tech and operations jobs as long as the front end stays in London as the industry has to focus on quality jobs.
Now, there are significant issues with this statement and mentality, which are exactly the same ones that brought to the collapse of 2008. It is a mixture of arrogance, lack of leadership and lack of people skills.
This type of mentality is worrying and shortsighted for several reasons:
- If your front office people make the deals and no one else is actually doing the work to make those deals go through (read put in place the technological infrastructure, the correct processes and procedure, the paperwork and controls) your front office people don’t go that far. It is a team work effort, not a one-man job. If you move your tech person to Edinburgh or to Birmingham and you have technical issues in London that requires immediate assistance, what do you do? Do you fly the tech team to London to fix it? Weren’t you moving the tech people to a less expensive location to cut costs?
- Creating a class A and a class B status rank within the company jobs very likely leads to a toxic work environment. As it often happens, some of the executives completely disregard the importance of human relationships and interactions in an organization: lots of talented employees that will be asked to move to cheaper locations due to the “second class” importance of their work will choose to go to employ their skills elsewhere, where they are actually appreciated and valued.
- Some of the executives disregard the costs linked to increased turnover and absenteeism rates. The promise of a move to another city for a better work/life balance may not go as smoothly as they think. Some people may not be prepared to relocate: maybe they don’t want to uproot their children, they may have a partner that has a job in London and is not keen to move elsewhere, etc. The though “If they don’t move they can be easily replaced as they are in tech and operational jobs” is shortsighted. There is real talent in all the positions of the company. Replacing excellent individuals in the middle and back office not only is not easy, but it is also costly. Those talented individuals have to be identified, selected, recruited, trained and retained.
- Some people in the Financial Services industry think we are still living in the 80s and that the work environment is the one depicted by the fictional character of Gordon Gekko in the movie Wall Street. They think that making deals, earning money at all costs is the only way to be successful in life and that only a small bunch of chosen people can do that job. They have not noticed that, since the 80s, the working culture has moved on, a lot. Millennials – in particular – and lots of other talented individuals are not necessarily attracted by jobs with long hours that do not promote a balance of work and life where the prize is making money and show off the luxury car. Additionally they don’t value jobs that don’t put the employee, innovation and human relationships at the centre of the company values and culture. A lot of smart individuals don’t value the Gordon Gekko’s way of doing things and go to work in other industries like tech where they get what they are looking for (financial reward is not the only possible reward).
It is disappointing to see that once again the Financial Services industry has shown that it is in desperate need for a cultural change and for leaders that value the people side of work and human relationships. Will we have to wait for the next crash to see a significant change? Hopefully not.
I suggest to go and watch “The Big Short”: the end of the movie is very cynical, but also very real. Haven’t you heard of the “bespoke tranche opportunity” yet? You will, soon. Not sure that the “disposable” techs and operational employees will be prepared to pay the bill this time.